Construction Monkey

Construction Monkey Blog

In retail and real estate there goes a saying that the three most important things are location, location, and location.  In construction there is a similar truth that the three most important things are relationships, relationships, and relationships.  Given the economic state of the economy (construction has contracted by as much as 60%), winning new work to feed the business is more and more difficult.

In retail locating your business on the corner of two major crossroads will provide you marketing and business that will drive business.  Any new retail development attempts to get major retail or movie anchors, because they know that all of the smaller retailers will look for those locations that drive traffic to them.  In construction contracting, the location dynamic does not matter, mainly because we have to go to the client's location to do the work, they don't come to our location.

Relationships with Customers is the same to contracting as location is to retail.  Unfortunately, not too many of us really focus on this.  Too many times the conversation in the bid room is about "how cheap can we get" or "that guy just bought that job".  Well I am here to say that is just flat wrong.  With the exception of completely open hard bids (anyone can bid it and all numbers will be opened in public with the low guy winning the work), relationships matter.

Our customers are purchasing a service, not a commodity.  Think about the local businessman that is out to start his first business a coffee shop.  He takes out a loan, putting his home up as collateral and needs to remodel a space to open it.  At that point, he is leveraging a lifetime of work for future success.  His financial and personal life hang in the balance of having a successful business.  Will he hire just anyone to do the work?  Or will he hire the person he trusts the most that provides the best value?  I bet he will hire around trust and not just anyone, he has too much at stake to take a risk.

If you look at your local competitors that are getting more work than last year, you will most likely see stronger relationships with the general contractors in town.  Take a look at some of the contractors that are not winning any work and you will find that they have poor relationships or have let their relationship folks go.  Customers in contracting are looking to contract around trust.  They do not know what we do, what the documents say, or how difficult the work is to do correctly.  They have to hire someone that they trust to get it done on time, in budget, and correctly.

Another way to look at it is how easy is it to sell your mother on doing her next home remodel?  How about the 248th person in the white pages?  So what is the difference?  Relationship!

Don't get me wrong, price and qualifications still matter.  Even your mom may go down the street if you plan on charging her $20,000 for a $200 job.  Your price, qualifications, quality, and safety must be in the competitive market range, but winning the work comes down to the relationship.  So next time you wonder how you can win the next job, you should evaluate your relationships and strengthen them.  If you have strong relationships with the customer you will win the work!

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through ConstructionMonkey.com.